Fat tax proposal based on responsibility

Fat tax proposal based on responsibility

24 August 2004

The author of a new report on a proposed fat tax has responded to criticism from the National Party's Paul Hutchison, who said that the principle behind any campaign against obesity had to be choice, freedom and knowledge.

“I agree, but the principle he forgot is responsibility,” said the report’s lead author, Jim Sinner of Ecologic Foundation.

“The proposal for a fat tax is based precisely on these principles: freedom for companies to choose what to produce, freedom for consumers to choose what to eat, and knowledge that they will have to take some responsibility for the fact that high-fat and sugar-rich foods are causing an obesity epidemic in New Zealand,” Sinner said.

He added, “The rise in obesity is a time-bomb threatening to blow the lid off health costs in the next ten to fifteen years. Health costs of diabetes alone – not to mention other illnesses linked to obesity – are set to quadruple to $1 billion/year if we maintain the current level of services to people with diabetes. As a society, we have basically 4 options for how to respond to these costs:

We can cut back on services to people with diabetes, offering them 1/4 the level of treatment they get now. We can cut back on health services to other people, which means that the production and consumption of unhealthy food would effectively be denying health services to thousands of New Zealanders. We can raise income taxes or GST, meaning that all New Zealanders would be paying for the extra costs while the food industry keeps making profits by selling unhealthy food. Or, we can put a tax on high-fat and sugar-rich foods so that those who are producing and consuming these foods help to pay for the costs that obesity imposes on society, and so that there is a strong financial incentive for the food industry to start changing the environment that is driving the obesity epidemic in New Zealand society.”

Sinner concluded that a fat tax is the only fair and sensible option, and the only one that offers a realistic hope of stemming the obesity epidemic.

About Ecologic www.ecologic.org.nz

The Ecologic Foundation is a "think tank" dedicated to promoting sustainable development through policy analysis, research, communication and consultancy. Its focus is on working toward solutions to environmental problems that integrate environmental, economic and ethical factors, rather than promoting one aspect at the expense of the other.

Jim Sinner, a resource economist, is a Senior Fellow at Ecologic where he leads a research programme on Institutions for Sustainable Development. His current research interests include the use of tradeable permits and other economic incentives for water allocation and water quality, local air pollution, and fisheries.

ENDS

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